rr2008 11 18 - · PDF fileGlobal Competitiveness Network of the ... Today innovation can be seen from the perspective of economics, business, ... infrastructure, macroeconomic

Innovation Framework and Strategies:

An APO Perspective

Asian Productivity Organization 1

November 2008


An APO Perspective


Preface

The drivers of productivity and competitiveness are increasingly shifting from efficiency and

quality to innovation and entrepreneurship. It is important to note, however, that rather than the

latter replacing the former, the latter are being added, similar to the addition of another layer of

excellence. With the proliferation of products in the marketplace and rapidly shortening life

cycles, it is vital to have efficient production as well as new products and services. Even as the

more economically advanced countries progressively increase their innovative capabilities, it is

necessary for them to continue to improve their infrastructure and processes. Conversely,

developing countries should commit some resources to innovation while they strive to

strengthen their basic structures and efficiency. The EU, USA, Australia, and others have been

making strenuous efforts to devise and implement innovation strategies and programs. Similarly,

some APO members have developed innovation blueprints and initiatives.

Realizing the importance of innovation, the APO organized a fact-finding mission in May 2007

to gain an in-depth understanding of the subject. The five-member mission visited France to

attend the OECD Forum 2007 on Innovation, Growth, and Equity and met representatives of the

Global Competitiveness Network of the World Economic Forum and Institute of Management

Development in Switzerland.

As a follow-up to the fact-finding mission, the APO formed an Expert Group on Innovation and

Competitiveness comprising selected national experts from Japan, the Republic of Korea,

Republic of China, Singapore, Malaysia, Thailand, and the Philippines. The experts were

responsible for formulating a common framework and strategy to harmonize the innovation

efforts of member countries. Three meetings were held in Langkawi, Singapore, and Kuala

Lumpur. The Malaysian Productivity Corporation and SPRING Singapore were the

implementing agencies for the respective venues.

The kick-off meeting held in Langkawi, Malaysia, deliberated on issues pertaining to the

formulation of a regional innovation framework and strategy for the APO. The follow-up

meeting in Singapore refined the framework and innovation strategies by country clusters and

identified role model countries to provide guidance on innovation and competitiveness. The

findings of the expert group were shared at a forum of more than 100 stakeholders in the

productivity movement in APO member countries. There was a call for open innovation and

effective utilization of potential resources through global coevolution. The principle of

formulating an appropriate innovation framework based on country clusters and stage of

development of APO members was affirmed.


An APO Perspective


IMPORTANCE OF INNOVATION AND GLOBAL TRENDS

Today innovation can be seen from the perspective of economics, business, technology, sociology,

and engineering. Innovation can relate to business models, markets, organizations, processes,

products, services, supply chains, and virtually every other aspect of modern commerce. Innovation

can be incremental or it can be breakthrough, disruptive, and radical in nature. There are myriad

definitions of innovation. One is that of the European Union that defines innovation as consisting of

“successful production, assimilation, and exploitation of novelty in the economic and social

spheres.” Innovation is widely recognized by nations to be an important cornerstone to achieve

economic and social progress. For fruitful outcomes, innovation should be approached in a systemic,

holistic, and timely manner. The World Economic Forum 2007/8 report recommends that the extent

of commitment to innovation should be commensurate with the stage of national economic

development, with the proposed figures of 5%, 10%, and 30% for countries in the primary,

secondary, and tertiary stages of development, respectively. This suggests that even for economies

that have attained an advanced stage of development (“the affluents”), innovation initiatives should

be driven concurrently with continued strengthening of the basic and efficiency enhancing factors.

At the other end of the scale, economies that are in the early stage of development should still

attempt to allocate modest efforts and resources to lay the foundation for innovation.

The U.S. Council on Competitiveness introduced the national initiative “Innovate America” in

2003 with the statement that “innovation will be the single most important factor in determining

America’s success through the 21st century.” Underpinning the U.S. national innovation agenda are

the three crucial bases of talent, investment, and infrastructure:

1. talent – the building of a national education strategy for a diverse, innovative, and

technically trained workforce, catalyzing the next generation of American innovators, and

empowering workers to succeed in the global economy;

2. investment – revitalizing frontier and multidisciplinary research, energizing the

entrepreneurial economy, and reinforcing risk taking and long-term investment; and,

3. infrastructure – creating a national consensus for innovation growth strategies, creating a

21st century intellectual property regime, strengthening America’s manufacturing capacity,

and building 21st century innovation infrastructures, i.e., the health care test bed.

The European Union launched the Lisbon Strategy in 2000 with the goal to “make the European

Union the world’s most competitive and dynamic economy by 2010.” In a subsequent review in

2003, the concept of a multidimensional nature of the innovation phenomenon was introduced. It

was postulated that while research is a major contributor to innovation, there is no value creation if

there is no entrepreneurial action. Yet another observation was that further classifications in addition

to technological innovations need to be identified. These include organizational innovation, business

model innovation, and presentational innovation (covering design and marketing). The

Entrepreneurship and Innovation Program (EIP) under the Competitiveness and Innovation

Framework Program (CIP) was implemented for the period 2007 – 2013 and advocated the

following:

4. access to finance for SMEs through EU financial instruments;

5. a network of business and innovation service centers;

6. support for initiatives to foster entrepreneurship and innovation;

7. eco-innovation – making sustainable development become a business reality; and

8. support for policy-making.

In May 2007, the Organization for Economic Cooperation and Development (OECD) embarked on

an initiative to develop a broad-ranging innovation strategy. This strategy would incorporate:

9. a cross-disciplinary, mutually reinforcing package of policy elements and recommendations

to boost innovation performance, covering non-technological innovation, both generally

applicable and country-specific (good policy practices, and where appropriate, policy

guidelines would be identified);


An APO Perspective


10. a framework that could be used to monitor and review the innovation environment and

performance of the innovation system;

11. enhancement of the existing mechanisms and forums for international discussion and

cooperation, including strengthened dialogue, especially with emerging economies and

other important stakeholders;

12. analysis to clarify the links between the policy domains of a comprehensive strategy, such

as those between innovation and entrepreneurship and how innovation contributes to

economic, social, and environmental goals; and,

13. better metrics to identify and benchmark innovation performance and the factors and

policies influencing it.

It was proposed that ICT, notably through the Internet, become a fundamental component of the

global economic infrastructure. It was also observed that a coordinated, coherent, “whole-of-

government” approach would be required.

Japan launched its “Innovation 25” strategy in 2006 to create a richly innovative society by

2025. This national strategy is aimed at integrating three key areas of innovation: innovation in

science and technology, innovation in social systems, and innovation in human resources. The

immediate measures identified for action included global environmental issues as a driver for

economic growth and international contribution, doubling investment for the next generation,

university reform, investment increase for science and technology to ensure the delivery of real

value, and a comprehensive innovation review (of regulations, social systems, norms, and rules).

Singapore laid down the National Innovation Framework for Action (NIFA) in 1998 as a

starting point to nurture innovation and develop an innovation roadmap. Eight key factors were

identified as critical to the success of the innovation movement: 1) education and training, 2)

government policies, 3) government support, 4) information, 5) infrastructure, 6) technology, 7)

markets, and 8) human resources. Recommendations made to address the gaps were: enhance

innovation education, strengthen innovation training, strengthen the linkages between market and

technology, review government support, strengthen infrastructural support, improve the innovation

environment, improve awareness, and review government policies and regulations.

In the Republic of Korea, innovation is focused more on government than on the private sector.

In 2004, the Republic of Korea launched innovation audit programs across all 48 governmental

agencies including the ministries. In fact, the World Economic Forum (WEF) reported that the

Innovation and Sophistication Factor value of the Republic of Korea jumped from 4.75 in 2004 to

5.08 in 2005. In 2005, the Republic of Korea started building a “Knowledge-Based Service Industry

Roadmap for 2015” for promulgating the learned concepts from the government sector to the private

industry. All public companies have begun to follow this innovation roadmap. As a result, a new

government division to specifically address the “Knowledge-based Service Industry” was formed

under the Ministry of Industry and Energy in 2006. In 2007, innovation had further spread into the

technology innovation level. Subsequently, “Integrated Industry Technology Roadmap 2020” was

promulgated for all 15 industries categories in 2007. The convergence of industries has now started

and the innovation has been widely understood as one of the national megatrends. In 2008, after the

presidential election, the Ministry of Industry and Energy even adopted the new name of “Ministry

of Knowledge and Economy” to reflect the importance of the innovation results.

In 2007, the Philippines announced the National Innovation Strategy to strengthen the country’s

competitiveness in the global knowledge-based economy and to transform the country into a

technology hub for Asia. The strategy was to focus on four key areas: strengthen human capital,

support business incubation and acceleration efforts, regenerate the policy environment for

innovation, and upgrade the public mindset toward a culture of innovation.

So far, most of the other Asian countries, including technology leader Republic of China, have

yet to promulgate specific national innovation strategies. In the case of Thailand, the National

Innovation Agency was set up in 2003 as the core organization to coordinate, foster, and partner

academia, research organizations, private enterprises, investors, and financiers. Malaysia has

factored in an innovation-led strategy in its ninth Malaysia Plan. In it, emphasis is given to service

innovation, and a multidisciplinary approach is taken that encompasses technology innovation,

business innovation, demand innovation, and socio-organizational innovation.


An APO Perspective


While some Asian countries have drawn up their own respective national agendas to instill

innovation in their societies and industries, so far there has been little collective effort to synergize

and share plans and programs. Useful lessons can be learned from the initiatives and experiences of

the European Union, which, like APO member countries, comprises countries at various stages of

economic development. Table 1 shows the distribution of EU countries as well as APO members

based on categorizations suggested by the World Economic Forum. It is clear that the spread is much

wider for APO members than for the EU countries.

The Global Innovation Scoreboard (GIS) and Global Competitiveness Index (GCI) are two

notable efforts to measure and compare competitiveness and innovation across nations. The GIS,

adapted from the European Innovation Scoreboard (EIS), rates innovation on five key dimensions:

innovative drivers, knowledge creation, innovation and entrepreneurship, application, and

intellectual property. The GCI comprises 12 pillars under the headings of Basic Requirements,

Efficiency Enhancers, and Innovative and Sophistication factors. The pillars under Basic

Requirements are institutions, infrastructure, macroeconomic stability, health, and primary

education. The pillars under Efficiency Enhancers are higher education and training, goods market

efficiency, labor market efficiency, financial market sophistication, technological readiness, and

market size. The pillars under Innovation and Sophistication Factors are business sophistication and

innovation. The GIS covers the European countries, the U.S., and the five Asian economies of the

Republic of China, the Republic of Korea, Hong Kong, India, and Singapore, and is innovation-

centric. The GCI includes data on 131 global economies – including all APO members except Lao

PDR, Fiji, and Iran, and provides a more broad-based assessment of a country’s competitiveness and

innovation. Since APO economies lie across a wide spectrum of economic development, the GCI

would be a more appropriate platform to adopt for the proposed APO Innovation framework. For a

more detailed study of innovation per se the GIS can be used.


An APO Perspective


Table 1: Countries/Economies at Each Stage of Development

Stage 1

Transition

from

Stage 1 to 2

Stage 2

Transition

from

Stage 2 to 3

Stage 3

APO Members

Bangladesh (BD)

Cambodia (KH)

India (IN)

Indonesia (ID)

Mongolia (MN)

Nepal (NP)

Pakistan (PK)

Philippines (PH)

Sri Lanka (LK)

Vietnam (VN)

Malaysia (MY)

Thailand (TH)

Republic of China

(TW)

Hong Kong (HK)

Japan (JP)

Republic of Korea (KR)

Singapore (SG)

European Union

Bulgaria (BG)

Latria (LV)

Lithuania (LT)

Poland (PL)

Romania (RO)

Czech Republic (CZ)

Estonia (EE)

Hungary (HU)

Malta (MT)

Slovakia (SK)

Austria (AT)

Belgium (BE)

Cyprus (CY)

Denmark (DK)

Finland (FI)

France (FR)

Germany (DE)

Greece (GR)

Ireland (IE)

Italy (IT)

Luxembourg (LU)

Netherlands (NL)

Portugal (PT)

Slovenia (SI)

Spain (ES)

Sweden (SE)

United Kingdom (UK)

Figure 1 shows the scores of the top four EU countries for the basic requirements (BR),

efficiency enhancers (EE), and innovation and sophistication factors (ISF). It is observed that all four

countries have a high BR score of around 6. Denmark has the highest BR and EE scores, and the

lowest ISF score. Germany, on the other hand, has the lowest BR score but the highest ISF score.

Figure 2 shows the BR, EE, and ISF scores for Hong Kong, Japan, the Republic of Korea,

Malaysia, the Republic of China, Thailand, and Singapore. Japan has a relatively low BR score of

5.41 but matches the ISF score of 5.70 for Germany. Among APO members, the Republic of Korea

has the second highest ISF score of 5.42, followed by the Republic of China (5.31), and Singapore

(5.14).


An APO Perspective


Figure 1: European Union (Top Four)

Figure 2: APO members (Top Seven)


An APO Perspective


Figure 3 provides a comparison of the top four EU countries and the top four APO members.

Excluding Singapore, the BR scores for APO members are lower than for their European

counterparts. The spread for the EE scores is narrower. For the ISF scores, Japan ranks well while

other APO members have some catching up to do.

Figure 3: Comparison of APO and EU (Top Four)

Figure 4 shows the scores for the bottom four EU countries. Although Greece is categorized in stage

3 and Malta in transition from stage 2 to 3 of economic development, their overall scores of 4.21 and

3.97, respectively, are lower than those of Latvia (4.41), Lithuania (4.49), and Poland (4.28), as

countries all still in stage 2 of economic development. For the bottom four countries the BF scores

are between 4 and 5, the EE scores around 4, and the ISF scores between 3 and 4.

Figure 4: European Union (Bottom Four)


An APO Perspective


Figure 5 shows that for the other 10 APO member countries, three distinct tiers can be

discerned: (i) India and Indonesia, (ii) Sri Lanka, the Philippines, Vietnam, Pakistan, and (iii)

Cambodia, Bangladesh, Mongolia, and Nepal. India and Indonesia have BR, EE, and ISF scores of

above 4. It is noteworthy that the EE scores are higher than the BR and ISF scores. For the tier (ii)

countries, the BR scores are around 4 while the EE and ISF scores are between 3.4 and 4. Countries

in tier (iii) have BR scores clustering around 3.5, EE scores under 3.5, and ISF scores at around 3.

Figure 5: APO Members (Others)


An APO Perspective


Figure 6 shows that the tier (iii) APO countries have scores that are well below their European

counterparts. Comparing the other end, the tier (iii) APO members are clearly behind their European

counterparts in all three factors. A closer match is found for the tier (ii) members.

Figure 6: Comparison of APO and EU (Bottom Four)

FRAMEWORK ON INNOVATION

While Asia has emerged as a protagonist in the global economic scene, the techno-economic growth

among Asian countries has been very uneven, resulting in a deepening of the divide between the

front-runners and those lagging behind. The former cohort of APO members, namely Japan, the

Republic of Korea, the Republic of China, and Singapore, has built up strong key institutions and

they are striving to increase their innovation capabilities. These economies measure up well in the

Basic, Efficiency, and Innovation factors compared to their European counterparts. The newly

industrializing APO members, on the other hand, need to continue to strengthen their basic

infrastructure and processes and make more headway along the innovation value chain. These

economies are found to fare relatively less well against their European counterparts. In drawing up

the APO Innovation Framework and Strategy it is necessary to take into account the Asian socio-

cultural background as well as the varying needs and constraints across the APO membership. The

framework will facilitate the charting of national and collective policies and programs and serve as a

platform for exchanges and sharing of best practices.

After extensive deliberations in the Expert Roundtable meetings in Langkawi, Malaysia in

August 2007 and Singapore in November 2007, the participants came up with the following terms of

reference for the APO Innovation Strategy and Framework:

14. innovation shall be viewed from a broad perspective, not merely as technological

improvements;

15. innovation shall be viewed across all economic sectors and industries;

16. the nature and level of commitment to innovation would vary according to the stage of

national economic development;

17. clustering is a useful means to form groups with common interests and goals; and,


An APO Perspective


18. the use of role models is a good approach to level up on innovation.

Based on the rationale as outlined in the background and the findings from the APO fact-finding

mission to France and Switzerland (proceedings of the 2007 OECD Forum on Innovation, Growth

and Equity and visits to the WEF and IMD), the participants of the Expert Roundtable on Innovation

formulated two versions of the APO Innovation Framework: a static interpretation and a dynamic

view on innovation and competitiveness.

For the static framework, three major triangles of material, human beings, and knowledge form

a cycle of knowledge creation by utilizing both material and human resources, as shown in Figure 7.

The derived knowledge is fed into the resource side for further enrichment.

Figure 7: Static Interpretation of the Innovation Framework

At the 2007 OECD Forum on Innovation, Growth and Equity, the prerequisites of innovation were

extensively discussed. In recent years, the specialist prerequisite is being emphasized alongside a

focus on leadership requirements as well as intangible asset management. In fact, the focus has

shifted from material-oriented innovation and competitiveness, to human- and knowledge-oriented

innovation and competitiveness. Experts also stress that international and interregional partnerships

as well as public/private partnerships must precede such prerequisites.

While material-related measures of competitiveness have been adopted by the Global

Competitiveness Index and IMD, the OECD has proposed to also consider the aspects of the “human

side” that create macro-economy, innovation, technology, and infrastructure. Although the GCI only

focuses on the workforce at the labor and lower level, there is a need to focus on leadership and

education to spur talent development of specialists in the areas of science and technology, research

and development, and business. Likewise, while earlier models focus on investment and input

resources and hope for results, we need to focus on tangible outputs of innovations, in particular,

intangible assets. A diagram of partnerships and innovation prerequisites is given in Figure 8.


An APO Perspective


Figure 8: Partnerships and Innovation Prerequisites

The dynamic Innovation Framework as shown in Figure 9 incorporates the factors and prerequisites

of innovation and competitiveness. The experts recommended that each country should create the

appropriate basic requirements and economic enablers labeled as “conditions” and “infrastructure.”

Governments will have to establish the infrastructure and provide the material resources required for

innovation. The material resources include the transportation, communications, financial institutions,

legal institutions, and structures that facilitate innovations. The “conditions” include focus on

leadership and training and education to foster talent development for specialists and the

commercialization of innovations.

Innovations are defined broadly to include business models, products, services, processes,

market relations, and new methods of organization and production. These advances that countries

desire are the outcomes of innovation. This includes the creation of new knowledge, intangible

assets, and improved institutional systems. The roundtable experts also highlighted that international

and interregional partnerships as well as public/private partnerships are essential and must precede

the prerequisites for innovation.

A continuous review and introduction of appropriate programs would ensure that the innovation

drive is kept dynamic and effective. The locus or major players of the intended programs are SME

(Small & Medium size Enterprises) and/or MNCs (Multi-National Corporations). Particular efforts

should be made to tailor programs for SMEs. With limited resources and generally more short-term

perspectives, SMEs require support in technology development and acquisition, finance, manpower,

and markets. To achieve maximum impact, governments may choose to prioritize and pay greater

attention to certain industry sectors and/or companies. Some countries have also decided to work

through business and trade associations. It is worthwhile for APO members to learn from the best

practices of one another.


An APO Perspective


Figure 9: Dynamic Innovation Framework

When applying the proposed innovation and competitiveness model at the interregional level, for

example to APO member countries, more-specific considerations are required. Unlike the cases of

the GCI and IMD report, the number of countries covered is small and their economic situations are

more heterogeneous. Therefore, a clustering of APO member countries into relatively more

homogeneous groups is necessary. Data for the proposed model can be accumulated in future studies.

For the time being, it is only possible to undertake partial analysis utilizing the material-side data

available in the GCI for all APO members except Nepal, Fiji, Iran, and Lao PDR. Based upon the

2006/7 and 2007/8 GCI data, four groups from the APO members can be identified; namely:

19. Group 1: Japan, Singapore, the Republic of China, the Republic of Korea, Malaysia, and

Hong Kong

20. Group 2: Thailand, India, and Indonesia

21. Group 3: Philippines, Pakistan, Vietnam, Sri Lanka, and Iran

22. Group 4: Bangladesh, Fiji, Mongolia, Cambodia, Nepal, and Lao PDR

Observing each member country’s movement between groups for the most recent six years, Japan

continued to maintain the top position of Group 1 while Singapore joined the top position in 2004.

The Republic of China joined in 2006 while the Republic of Korea joined in 2007. Malaysia moved

to Group 1 from Group 2 in 2004. Thailand consistently maintained its position in Group 2. From

2003, for 3 years, India joined Group 2, then moved back to Group 3. Indonesia joined Group 2 in

2004, then moved back to Group 3. The Philippines maintained its position in Group 3. Sri Lanka

and Vietnam joined Group 3 in 2003. Bangladesh and Mongolia have constantly remained in Group

4. In Mongolia’s case, GCI data were reported starting from 2005. Four members, Nepal, Iran, Fiji,

and Lao PDR are not included in the table below due to unavailability of GCI data.


An APO Perspective


Table 2: Movement of APO Members within the Groupings over the Last Six Years

2002 2003 2004 2005 2006 2007

Japan 1+* 1+ 1+ 1+ 1+ 1+

Singapore 1 1 1+ 1+ 1+ 1+

ROC 1 1 1 1 1+ 1+

ROK 1 1 1 1 1 1+

Malaysia 2 2 1 1 1 1

Thailand 2 2 2 2 2 2

India 3 2 2 2 3 3

Indonesia 3 3 2 3 3 3

Philippines 3 3 3 3 3 3

Sri Lanka 4 3 3 3 3 3

Vietnam 4 3 3 3 3 3

Bangladesh 4 4 4 4 4 4

Mongolia 4 4 4

* In the above, “rank+” means by the higher factor value in the same group.

By monitoring the growth pattern of members, it is possible to trace the development path and

identify the appropriate role model for members in the lower groups. For example, Indonesia can

serve as a role model for the Philippines, and Malaysia for Thailand and Indonesia. Likewise, the

Republic of Korea can be a role model for Malaysia and India, as indicated in Figure 10.

Figure 10: Potential Role Models Among APO Member Countries


An APO Perspective


In a similar vein, developed OECD countries can be used as possible role models for Group 1

APO members – Japan, the Republic of Korea, the Republic of China, Singapore, and Malaysia.

Detailed analysis for the Group 1 members and quantitative analysis have been worked out during

the studies. Developed countries identified as useful role models are the United Kingdom, Canada,

Norway, Sweden, Switzerland, Denmark, the Netherlands, Austria, Australia, and Ireland.

We try to identify the role model countries factor by factor. For example, Canada can be a role

model for the Republic of Korea in both factors of Basic Requirements and Efficiency Enhancers.

By observing the most recent five-year trends of both countries, Canada’s Basic Requirements (BR)

factor scores are higher than those of the Republic of Korea while both countries share the same

growth pattern in respect to Efficiency Enhancers (EE). However the Republic of Korea’s

Innovation and Sophistication Factor (ISF) scores demonstrate very unique growth patterns as

opposed to those of OECD countries (Figure 11). You may observe the exceptional growth in 2007.

Figure 11: Example of Factor-By-Factor Role Model Countries (Republic of Korea)


An APO Perspective


Figure 12: Example of Factor-By-Factor Role Model Countries (Japan)

Unlike other APO Group 1 countries, the Republic of China has role model countries, such as

Ireland and Norway, whose factor scores are lower than those of the Republic of China while the

growth pattern is the same.


An APO Perspective


Figure 13: Example of Factor-By-Factor Role Model Countries (Republic of China)


An APO Perspective


Figure 14: Example of Factor-By-Factor Role Model Countries (Singapore)


An APO Perspective


Figure 15: Example of Factor-By-Factor Role Model Countries (Malaysia)


An APO Perspective


Table 3: APO members and possible role models

Basic Requirements Efficiency

Enhancers

Innovation &

Sophistication

factors

Role model Role model Role model

Japan Unique Sweden Sweden, Switzerland

Republic of China Ireland Ireland Norway

Republic of Korea Canada Canada Unique

Malaysia Unique Austria Norway, Austria

Singapore United Kingdom Australia, Ireland Denmark

Innovation will help member countries achieve higher productivity and competitiveness. In turn,

increased productivity will lead to the sustainable growth and development, thus help to achieve a

better quality of life. Innovation now prevailing in various emerging sectors including health, energy,

environment, information and communication, finance in the form of both high technology

applications, and/or service improvements, as shown in Figure 16.

Figure 16: Innovation applications and outcomes


An APO Perspective


CONCLUSIONS

After extensive deliberations by the expert group over three meetings in Langkawi (Malaysia),

Singapore and Kuala Lumpur, the following salient observations were derived:

1) The level of commitment to innovation among APO members should be tailored to the stage of

economic development of individual members;

2) The outcomes sought and areas of focus may vary among the APO members;

3) The grouping of members will facilitate the sharing of best practices among cohorts;

4) The adoption of role models from higher groups would accelerate the learning process;

5) The European Union can serve as a good reference to benchmark the progress and achievements

of APO members; and,

6) The data available in the GCI can serve as a good mechanism to measure and compare the

competitiveness and innovation capacity of APO members and their international counterparts.

The expert group also formulated static and dynamic versions of the Innovation Framework that

could be adopted as a reference framework by APO members.

RECOMMENDATIONS

The Expert Group on Innovation focused largely on the seven participating APO members. More

APO members were involved in a follow-up forum in Kuala Lumpur. As suggested by the WEF,

even countries that are at an earlier stage of economic development should attempt to allocate some

resources to build up their innovation capabilities. More innovation programs should be organized

by APO for members to gain greater awareness and share best practices. While the GCR provides a

good assessment of competitiveness and innovation, later studies may wish to consider the use of

other measures such as the Oslo Manual.

Innovation is recognized internationally to be an important driver for economic and social

progress and well-being. The United States and European Union have drawn up the comprehensive

blueprints and programs to forge ahead. It is imperative for APO members to keep up. Observational

study missions to these countries would be beneficial for APO members to appraise their

comparative positions and understand the challenges and best practices.


An APO Perspective


ACKNOWLEDGEMENTS

The Report on Innovation Framework and Strategies: An APO Perspective was prepared with inputs

from the following persons:

Expert Group on Innovation & Competitiveness (Members and Observers)

1. Prof. Sang Chan Park, Department of Industrial Engineering, Korea Advanced Institute of

Science and Technology, Republic of Korea (Chief Expert)

2. Dr. Loke Chong Lee, Deputy Executive Director (Industry), Singapore Institute of

Manufacturing Technology, Singapore (Member)

3. Dr. Benjamin Yuan, Director, Institute of Management of Technology, National Chiao Tuang

University, Republic of China (Member)

4. Dr. James K. C. Chen, Assistant Professor, Department of Business Administration, Asian

University, Republic of China (Observer)

5. Dr. Chihiro Watanabe, Professor, Department of Industrial Engineering & Management, Tokyo

Institute of Technology, Japan (Member)

6. Dato' Nik Zainiah Nik Abd Rahman, Director General, Malaysia Productivity Corporation,

Malaysia (Member)

7. Ms. Shahuren Ismail, Director, Malaysia Productivity Corporation, Malaysia (Observer)

8. Dr. Antonio J. Pineda, Associate Director/General Manager, Ayala Corporation/Isuzu Cebu, Inc.,

Philippines (Member)

9. Dr. Wantanee Chongkum, Department Director, National Innovation Agency, Thailand

(Member)

10. Mr. Preeda Youngsuksathaporn, Department Manager, National Innovation Agency (Observer)

11. Mr. Lee Kia Yoke, Asian Productivity Organization Secretariat, Tokyo

The APO wishes to thank all contributors to this report, especially the seven-member Expert Group

on Innovation and Competitiveness. In particular, we are grateful to Professor Park Sang Chan, the

chief expert, for leading the group and overall research effort, and to Dr. Lee Loke Chong, expert

group member, for his help in reviewing and editing this report.


An APO Perspective


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Michael E. Porter, editor. The Global Competitiveness Report 2007 – 2008. Palgrave Macmillan;

2007.

F. Duane Ackerman, et al. Innovate America. National Innovation Initiative Summit and Report,

Council on Competitiveness; 2004.

Competitiveness and Innovation Framework Program (CIP). CORDIS: European Innovation Portal.

Innovation and Growth – Rational for an Innovative Strategy. OECD; 2007.

Sanae Takaichi, et al. Innovation 25 – Creating the Future, Challenge Unlimited Possibilities.

Interim Report, Innovation 25 Strategy Council; 2007.

National Innovation Framework for Action. Spring, 1998.

Fortunato T. De La Pena, et al. Filipinnovation – The Philippine National Innovation Strategy.

National Innovation Summit; 2007.

NIA Perspective. National Innovation Agency, Ministry of Science and Technology.

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